Samvat 2066: The Year of FIIs

Samvat 2066 was clearly the year for foreign institutional investors or FIIs. These FIIs have pumped in over Rs 1,30,000 crore – the highest ever witnessed by India – and have been the key force responsible for driving the markets to a new high (closing basis) on Thursday.

With uncertainties high in most key global economies, investors had fewer options to choose from. India benefited from this scenario and figured among the most sought after investment destinations globally, thanks to its strong domestic growth story that bounced back to normative levels with little push (stimulus) from the government. In major global markets, India ranked the third best performer in Samvat 2066.
 

SENSEX: GAINERS & LOSERS
Gainers	CMP	%chg
Tata Motors	1,185	105.50
TCS	1,053	73.00
Mah & Mah	760	62.30
Hindalco	218	61.80
ITC	175	39.90
Losers
Sterlite Ind	176	-16.60
Reliance Infra	1,043	-19.70
Reliance Comm	180	-24.40
DLF	349	-24.40
Jaiprakash Asso	124	-28.30
CMP is in Rs  and as on 3rd Nov' 2010 % change is over 17th Oct' 2009 Data compiled by BS Research Bureau

The FII flows have been so robust that it has absorbed the outflows by domestic institutional investors (DIIs), who have pulled out over Rs 22,000 crore during Samvat 2066 — the largest ever in India’s history. Notably, experts believe that more FII money is likely to flow into India.
 

CELEBRATION TIME
Year	Samvat	Muharat Trading	Change *		Investment (Rs  cr)
			(%)	Absolute	FII	DII
2001	2058	14-Nov	-17.1	-644	13,279	NA
2002	2059	4-Nov	-4.0	-125	2,833	NA
2003	2060	25-Oct	60.7	1,815	20,940	NA
2004	2061	12-Nov	24.2	1,162	39,216	NA
2005	2062	1-Nov	33.2	1,980	43,960	-2,055
2006	2063	21-Oct	60.3	4,793	42,117	-365
2007	2064	9-Nov	48.4	6,171	78,391	14,534
2008	2065	28-Oct	-52.4	-9,900	-50,081	79,334
2009	2066	17-Oct	92.3	8,318	71,332	30,254
2010	2067	5-Nov	18.1	3,140	130,512	-22,264
* change over previous Samvat; FII & DII 2010 data (till November 2,  2010); Data compiled by BS Research Bureau                                                                                          Source: SEBI, BSE

While the government had announced various measures to increase investment in infrastructure and boost consumption, infra plays did not deliver desired returns on the bourses. Positively, with more money in the hands of the consumer – thanks to tax breaks and the economic recovery – consumption-based businesses have done well. The proof: The two BSE sector indices namely, Consumer Durable and Auto have delivered 50-80 per cent returns since the start of 2065 Samvat, helping them emerge the first and second best gainers, respectively, among sectoral indices.

On the flip side, realty and power, the two star performers in the bull-run of 2007-08, delivered the worst returns. Clearly, investor’s memory hasn’t faded – many of them lost heavily following the sharp fall in stock prices (of real estate and power companies), which was then factoring in future growth of the companies leading to astronomical valuations.

In the infra space, with some roadblocks still around, the CNX Infra index has been a laggard but experts believe it will change going forward. Amid global uncertainties and with the demand for metal yet to show a clear sign of revival, the metal index’s performance has also been subdued, despite Tata Steel (the biggest weight in the metal index) and Hindalco witnessing a turnaround in their global operations.

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